Introduction - Buffalo NY / Niagara NY

[David H.]

Hi Everyone,

I am new to the BP community.  I am a computer programmer by day, with a wife and 2 kids.

I am currently in a buy and hold condo that is cash flow positive along with our primary residence that has an in-law apartment that is cash flow neutral (family member).

I am looking to expand my real estate investments in Niagara County, NY.  I am in the research/education phase and trying not to make a move until I have a smart educated move.  I have found a condo that is cash flow positive, but I am leaning towards investing in a multi-unit (2-3 units).  My goal is to have 10 units in the next 10 years.

For education I am reading books, blogs, articles, and listening to BP podcasts.  I have a good friend that has 9 units total that we work together to check over each other's deals.

I do have a question about using my current HELOC to purchase my next deal. 1. Should I use all of it and then have no closing costs? 2. Should I use a Home Equity Loan instead of the HELOC? 3. I have a FHA loan on my condo I am renting out, can I get another FHA loan?

Thanks,

David

[Michael Sobotka]

FHA loans are for owner-occupied and cannot become a rental for one year. There are several important numbers other than being cash flow positive. The greatest being the cash-on-cash return in my opinion. You should be focused on positive cash flow properties with low down payments. Don't you think your assets would increase faster with multiple properties. And with minimum down payments. Tree of my last 4 purchases have had down payments of roughly $4000 including closing costs to be cash flow positive $1200/month. Think of it this way, would you rather earn a 20% return on one property of a 13% return on 10 properties?